The Leadership Hires That Actually Scale a Service Business

Building a great service business requires more than hiring great technicians. It requires building the right leadership team.

In this episode of Entry & Exit, Stephen Olmon and Collin Trimble share how they've approached key leadership hires at Alarm Masters. They discuss when to hire directors, why operations is often the first bottleneck, and how to know when your business is ready for executive-level talent.

They also cover hiring ahead of growth, budgeting for A-players, lessons from promoting internally, and the framework they use to build a leadership team that can scale.

In this episode:

•  When to make your first executive hire 
•  Why operations becomes the biggest bottleneck 
•  Hiring ahead of growth 
•  Budgeting for A-player talent 
•  Internal promotions vs. outside hires 
•  Building your leadership team in the right order 

Connect:

Stephen Olmon — https://x.com/stephenolmon

Collin Trimble — https://x.com/TXAlarmGuy

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Transcript

When Ops Breaks Down

SPEAKER_00 0:00

Operations is hard. You have kind of one person doing both, but they're not doing either really well. We are a service business and we are graded on the quality of our installation. You can install a job, but if you cannot install it well, you're creating more pain for you than if you would have never sold a job. It was a little bit of like a as a result of growth, we had to go and hire somebody outside of life.

SPEAKER_01 0:24

Hey, you need to be honest with yourself. Do you want to run a lifestyle business that's doing 300k a year of net income and life's good and you're doing your thing and you just call on a kind of manage status quo? Okay, cool. Just admit that. And don't go weirdly make like this one random expensive key hire because it feels like you're doing something productive.

Podcast Intro Key Hires

SPEAKER_01 0:49

Welcome to Entry and Exit. My name is Steven Ullman, and I have Colin Trimble with me. And we run Alarm Masters by day, and also by day and night, we run this podcast. And we hope it helps you. And today we're specifically talking about key hires. All things key hires, how to make them, when to make them, the good, bad, and ugly of key hires. And we are right in the middle of trying to make a key hire. Maybe two. And uh so it's relevant.

SPEAKER_00 1:22

Yeah, I one of the things we've gotten feedback on before is just, hey, can y'all talk more about the stuff that you're actually going through in the moment? And we are going through this now. If you're scaling your business, you're probably making key hires all the time. Um and we are. And so right now we're trying to make a key hire specifically for a director of finance role. Um we have made several in the past. I think it's interesting. I think we should talk through the progression of key hires we've made to this point and the key hires we're searching for now, and then additional hires we'll probably be making in the future.

Three Departments Explained

SPEAKER_00 1:59

Sure. We I like to think of the business as a three-headed kind of stool or three-headed, three-legged, maybe? Is that right?

SPEAKER_01 2:09

If you're looking for a stool, it's a it's a three-legged stool, but that would be a little off balance.

SPEAKER_00 2:14

Yeah. So anyway, there's three main departments of our business. And the three main departments are our customer success group, which you might call a customer service. We put billing in there, case handling, monitoring signals, running down any issues at all the customer has. Basically, anything that comes into the business is coming in through them, and they are solving it using their tools, the quarterback, the solution. Uh, we've got the sales department, pretty self-explanatory, and then we've got um the operations department, which both projects and service fall underneath. Um, there are other departments, or I should say there are other uh responsibilities like marketing. Right now, Steven manages all of our marketing. Um, he's the head of marketing. I could, you know, that's we don't have a marketing department. Uh, MA, Steven is the head of all of our MA. That is, there's not a department really. We're kind of building some of that out, but Steven is sort of over that. Yeah. Um, so there's some stuff that are future key hires that we'll be making. But the order of operations for us basically went customer success director first. And the main reason why is there is so much tactical stuff that can get you bogged down as an operator with billing discrepancies, service calls, all this stuff. Anytime a customer's frustrated, a cancellation request, a fail to communicate, like any anything, collections, contracts, blah, blah, blah. So there's so much tactical churn in your business that bogs you down. And having a leader, not somebody that's just like, oh yeah, they respond, they're responsible for that. No, somebody that thinks strategically about it and is accountable to a specific performance metric, was really important. What that did for me was allowed to free me up to think about the other two bigger pieces of our business, which is operations and sales. So I would say that's where we started, right? Like, do you remember us having lots of conversations about that? I was like, dude, I'm getting overwhelmed.

SPEAKER_01 4:14

I can't keep up with it. And we didn't feel like we could do it all concurrently. We kind of, there was a bit of an order of operations.

SPEAKER_00 4:21

Yeah.

Scaling Operations Right

SPEAKER_00 4:22

We kind of ran around a different structure on operations. It's really tough. Operations is hard, uh, really sub five million of top line revenue. Um because it's like you maybe don't have enough project pipeline to have just a project group and just a service group. And it's you have kind of one person doing both, but they're not doing either really well. And so scaling operations was extremely challenging. Uh, and we made our first kind of key hire in that department as a director of ops who was over both uh the project and the service side. And we really didn't have a manager for both of those departments. We had kind of like a lead guy supervisor over each department, but they were kind of a working person as well, like doing the actual work and kind of managing. And then as we grew, we scaled in having managers over both of those departments. And that was probably the most powerful thing that we've done in our business in terms of we are a service business, and we are graded on the quality of our installations and our service. You can sell a job, but if you cannot install it well, you're creating more pain for you than if you would have never sold a job. So finding somebody that can think strategically, and our director of ops is a non-technical resource. He's a business acumen shout out, Albert, business manager, really. He's not technical, but he has the technical chops to understand anything the guys throw at him. When they throw a trouble, you know, code at him, he's like, I know what that is. Does he know how to go troubleshoot really complex stuff? No, he does not. But he understands all of it conceptually and can communicate their language and like he's he's extremely valuable in that area. And that really made a huge difference for us. But then we found an installation manager and a service manager that their whole job is to focus on their department. And those two things turned the performance level up of both departments in a big way. Um, that's when we got really serious about chasing service revenue. We got really serious about tracking project margins and labor hours and you know, tracking profitable change orders and whatnot. So I want to take a pause for a second because I think that like that has been the two um biggest and also hardest. I would say director of customer discuss was amazing, and it's really the same one that we started with. The director of ops, we kind of had to cycle through and kind of figure out trial and error. Um but well, as we always say, look for an A player. Like look pay pay the guy and look for the A player.

SPEAKER_01 7:08

You can be tempted to promote from within, and uh that can be fine. Um, we kind of tried to do that on the op side, and it didn't work out. And I think we trusted someone, but we weren't honest about what their real skill sets were, and we just tried to kind of plug a hole. Um, and then we was like decided okay, that's not really working out, and we went external to bring in someone who had the right skill set and talent level that we needed. And the other component of this is comp. And a lot of these key hires, you hear you hear this in sales, but I actually think it's true for all of these key hires. You hear you have to hire ahead of sales, you know, if you want to kind of have that inertia and momentum, have that quote on hockey stick growth. I actually think that's true across all of these key hires, and it was true for us, like it was uncomfortable to make those hires and budget those costs. And um, not that we were like, oh man, I don't know where the money's gonna come from. It wasn't that desperate, but it was uncomfortable. And we were pushing and realizing, man, in order to continue to take this next jump, we have to have someone really talented in this role. And we need to do it now because it's gonna take a few months for them to kind of onboard, ramp up, whatever.

Hiring Ahead of Growth

SPEAKER_01 8:38

And that's really where I feel like we're at right now. On the director of finance hire, um, it's not like we're replacing someone, you know, between you and I, external accounting team, like we've kind of pieced it together, and now the business is growing and it's such a size, like we really need this role. Yeah, but it's a little uncomfortable. And actually, uh, here's a fun little inside baseball, you know, component. We didn't budget for it this year, we budgeted for it for next year, projected out for our 27 budget. Oops. But we've been growing, and so we do have the bandwidth to be able to go do that, yeah, but it it wasn't really in our plans, and it's a feels a little early, but we need it. And so just like you have this concept of hiring ahead of sales, I think you have to hire slightly ahead of the growth, your your try your targets, which is also another reason why you need to have goals, they need to be trackable, they need to be held accountable to them, you know. And so, in order to achieve those things, you're gonna have to hire some of these kind of key peoples a little bit earlier, and they might cost a little bit more than what feels comfortable.

SPEAKER_00 9:49

Well, that's what happens with our with our director of sales. Like, we we weren't really looking to hire the director of sales role because I was running sales and we realized we needed real management over that department, and um the pay was more than we were had budgeted or uh were comfortable paying in that exact moment. But we're like, we know this person, he this he's an A player, and we have made more money as a result of that. Like the business has thrived as a result of that, and so um sometimes you have to make these decisions. You cannot hire everybody, you can't spend all the dollars on every person, right? So you have to get strategic. Uh, I think there's other ways to pro to to incentivize people. I think the quality of work, the ability to move up, I think the culture, I think all those things matter. Um, and and to your point, like we're now in this season of needing to hire this director of sales. But here's the here's the reason why we have to hire the director of sales because we're growing faster. Sorry, director of director of finance finance, yeah. And the reason we have to hire them is because we're growing faster than we anticipated. Like we we've got a we're doing big boy acquisitions, a lot of them all at once. And as a result of that, we need it, and they're complex, and there's lots of modeling and a lot of accounting moving parts. We needed a director of finance now to be able to hit the the strategic goals we want to be able to hit. Um, and so it was a little bit of like a as a result of growth, we had to go and hire somebody outside of our budget, which I think is a good problem, right? Like, you'd rather be hiring that person rather than like, oh, I'm hiring a director of sales because we we're not growing. Well, that's a tough place to be.

SPEAKER_01 11:32

That's true. Um, and this comes back to things we've talked about on past episodes of like, hey, you need to be honest with yourself. Do you want to run a lifestyle business that's doing 300k a year of net income and life's good and you're doing your thing, and you just go on a kind of manage status quo? Okay, cool. Just admit that. And don't go weirdly make like this one random expensive key hire because it feels like you're doing something productive. Like, if that's not actually your plan, don't do that. Um if you are, then you need to be mentally prepared that you're probably going to come up on some of these moments where you're gonna hit the crossroads, man. I probably do need to go make this higher, and that stinks because it wasn't totally in my plans, or man, it seems like the market comp is 30 grand higher than what I thought it was gonna be. Oops, you know, so um I would just, if you are kind of having that growth mindset and that's what you're mapping to, you better be prepared that you're gonna hit some of these moments from a team building perspective that'll that'll feel uncomfortable, that are gonna feel like you know, some uncertainty. But I would say press through that, make a plan, hire the right person that actually fits with the need, not fits the number necessarily. I mean, within reason. Um, you know, at a certain point, maybe something's too expensive in that exact moment. Maybe you have to

Interviewing and Hiring Plan

SPEAKER_01 12:56

wait another quarter. Um, so um the the last thing that I want to add to this is do not make the mistake of only interviewing like one or two people. Um we have done that, and it it can feel productive, like, oh man, we quickly found someone who perfectly fits the thing, and and you rush into it because you think you really have this need, and then you go, oops, that was that was maybe a little misguided. So I think a good number for a key hire is interviewing after you screen them, like you know, for the direct director of finance, we've had nearly a hundred applicants. Um, and I've personally gone through every single one of their profiles, resumes, backgrounds, and I only reached out to less than 10 people um because a lot of those people for different reasons didn't quite fit. And so there's kind of some pre-screening and then interviews, second-round interviews, like so I would I would kind of have a floor and then maybe a ceiling. Like, do you need to interview 35 people? No, that's that's all maybe maybe you're targeting and your job description was off if you had to interview that many people. Um, but but more than more than three or four, less than 20 is like a good aim.

SPEAKER_00 14:21

If you find yourself trying to convince yourself to hire somebody, don't do it. You need to find yourself convincing them because you're so in love with that candidate. And I think the last thing I'll add before we close out is just like, what do you think about in the terms of the order of operations? You should have a plan for hiring the people. Like, don't just hire everybody at once, and you should have a plan and you should give yourself some growth metrics to be able to hit that plan, and you should take 30% higher than what you have budgeted and budget that, because that's what you need to have room in your budget for to be able to get a player. And I would say if you are operationally minded, you should have somebody focused like a killer sales. If you are sales-focused operator, you should start with operations. Uh, but the very first thing you should do before any of that is get all of the tactical stuff off your plate. So if you have a lot of cases and billing and stuff like that that's on your plate today, if that makes up more than 10% of your work, that should be your number one hire so that you can think about the more strategic departments. So that's just our that's how we did it. That's how we think about it. But you know, let us know in the comments if you have a different perspective on it.

SPEAKER_01 15:30

Yeah. And and really before any of those things, the first thing you should do is like, agree, subscribe, yeah, comment and share. Ding. Because sharing is caring. Ding. Yep. Yeah. Thanks and gig them. Have a great day.